Extruding along vertex normals gives weird result
Hard to say where you've messed up, anyway, here is what you should do, if I've correctly understood what you try to do (?):


Create your edge loop at the middle of your cylinder with ctrl R.
Bevel it with ctrl B.
Press E to extrude then Enter right away.
Press S to scale your extrude, and shift X (or Y depending on the orientation) to constraint your extrude on both Y and Z axis.